The reaction to the news from Italy — that Prime Minister Mario Monti will soon step down to make way for early elections featuring the possible return of Silvio Berlusconi — has been nearly unanimously negative and, in some quarters, uncharacteristically vocal. “Worried about the resignation of Italian PM Mario Monti,” wrote Finland’s Minster for European Affairs, Alexander Stubb, in a tweet on Sunday morning. “I think he is one of the best European leaders we have.”
Martin Schulz, a German politician whom Berlusconi once likened to a concentration-camp guard, was more direct. “Europe needs stability,” he said, in an interview with the Italian news agency ANSA. “And Mr. Berlusconi is the opposite of stability.” Even Cardinal Angelo Bagnasco, head of the Italian Bishops’ Conference, expressed his worries. “We can’t allow a year of sacrifices to be ruined,” he said, referring to painful austerity measures Monti has introduced in order regain the confidence of the markets. “What’s stunning is the irresponsibility of those who think of their own interests while the house is still burning.” By Monday evening, the markets had weighed in as well, with the Milan Stock Exchange down 2.2% at the close of trading.
The crisis kicked off at the end of last week, when Berlusconi used a visit to the practice grounds of his soccer team, A.C. Milan, to announce he would be standing as a candidate for Prime Minister. The next day, his allies in Parliament partially withdrew their support of Monti, abstaining on a crucial vote. The move wasn’t enough to bring the government down on its own, but it promised months of deadlock. The ground seemed laid for a long winter of down-to-the-wire votes, with Berlusconi forcing his opponents to take ownership of Monti’s often unpopular proposals, each time registering his disapproval but allowing the government to limp on.
Instead, on Saturday evening, Monti announced he wouldn’t wait for a formal loss of support and handed in his resignation, effective on the passage of a budget bill. “I preferred that the decision and the announcement would fall on a day when the markets were closed,” he told the Italian newspaper La Repubblica, “with 24 or 36 hours [for investors] to absorb the eventual blow.” The vote on the budget could take place as early as the days before Christmas and is likely to happen before the end of the year. Italy’s newspapers are predicting a vote at the end of February.
For Berlusconi, who was forced from the premiership by the markets just over a year ago, the move seemed to be the culmination of a longstanding plan to step aside, tacitly support Monti as he passed unpopular provisions and then return as the opposition. Indeed, one paper friendly to the media magnate seemed to start laying the groundwork even before Monti had taken office. “Here comes Mr. Taxes: Watch your Wallet,” read the headline on the day after Berlusconi resigned in November last year. On Thursday, the process was complete: “I’m returning with a sense of despair to take care of public affairs,” Berlusconi told reporters. “And I’m doing it once again out of a sense of responsibility.”
To be sure, Berlusconi isn’t favored to win. His party is currently polling at roughly 15%, less than half as much as the election’s most likely victor, the center-left Democratic Party. Monti too has hinted he might consider a run. “He knows that he can’t win,” says Roberto D’Alimonte, a professor of political science at Rome’s LUISS Guido Carli University. “The best that he can hope for is to join [the center-left] and form a more balanced coalition, more balanced toward Europe and the need for more serious reforms.”
In the short term, the upheaval leaves Italy without a rudder in European waters that have yet to calm. In addition to the budget, there are several other bills waiting for parliamentary approval that may never see passage. Meanwhile, with E.U. leaders set to meet later this week, to discuss European finances, Monti will have less leverage to counter German proposals with policies more favorable to Italy. With Spain, France and Greece, similarly weak, southern Europe is losing its most powerful voice. “It’s going to make for a very one-sided conversation,” says Erik Jones, director of the Bologna Institute for Policy Research at the Johns Hopkins University SAIS Bologna Center. “It’s going to be more lopsided now than ever.”